Bringing the beef back

Governor Pete Ricketts, 40th Governor of the state of Nebraska

Leading an 80-strong trade delegation from the United States to Macau,
Hong Kong and China, Governor Pete Ricketts of the state of Nebraska describes in an exclusive interview the implications of China’s recently lifted 13-year ban on beef products from the U.S., the potential from a developing middle-class market and the investment opportunities for Chinese investors in his state.
 

Your visit comes at an interesting time for U.S.-China relations. Why now?
I’m a relatively new governor and we’re trying to establish relationships in China to be able to expand trade. So last year we came here to Beijing, this time we came back to go to Shanxi province for a demonstration farm, we were in Shanghai establishing relationships with businesses there and now we’re here in Macau and Hong Kong. Especially with China getting ready to open up the beef market it’s a great time to be here to talk about why we’ve got the best beef in the world.

What advantages do you see in focusing on the middle-income market?
I think that as you see the rise of the middle class in China they’re going to be looking for new products - better products - and going to be expanding their diet. This is one of the things they’ll be asking for and we want to meet that demand.

Aside from the Mainland market, are their solid opportunities in the Pearl River Delta for your delegation?
Absolutely, look around us here in Macau where you’ve got all the casinos - and you’ve got a market here that’s coming (to this city), they’re going to want new experiences, they’re going to want to try different things they may not be able to get back at home. And that’s where supplying Nebraska beef and branding that so people know we have the best beef in the world is something that can help the casinos in branding their experience with our experience.

Macau has been spoken of as a platform for Portuguese-speaking countries’ trade with China. Are you looking at it as the same for U.S.-China trade?
Certainly we think there’s a chance here to be able to expand the identity of Nebraska beef to a market that is going to spread out all across Asia and really the entire world. So by doing the events here and having companies here brand Nebraska beef gives us a chance to get a lot broader exposure than we would ordinarily.

Are you mainly focusing on the integrated resorts as potential clients?
Yes. It’s [mostly those] having those kitchens - they’re going to be looking for products to differentiate themselves and that’s why we’re here.

What about small and medium enterprises?
We’re really looking for anybody who wants to do it. Last night I was meeting with a gentleman who represents SMEs in Shanghai - so it’s about trying to get the Nebraska name out there for the people who want to brand themselves with a different experience.

What are you pitching as the qualities of your state’s main product: beef?
What you’re going to find is a cut of beef that’s been raised in the best environment in the world, with superior heritage and genetics and also by ranchers who are fifth generation. They're the original conservationists, they really take care of the land and their animals. And so what you get is a cut of beef that’s tender, juicy and really outstanding.

On this trade mission are you only focusing on promoting beef?
That’s what we’re really pushing here in Macau, but with the trade delegation we brought a variety of businesses to be able to establish relationships both for people who are in Nebraska looking to enter the China market, and also meeting with Chinese businesses that are looking to invest in the United States.

Is there another non-beef segment predominant within the delegation?
One of the things we did with the demonstration farm in Shanxi province - we had our irrigation companies up there. Nebraska’s the largest irrigated state in the country, in the United States. And we have centre pivot (machinery) manufacturers that are the best in the world - that are always innovating on how they can grow more crops with less water. We’ve tripled our productivity in Nebraska and there’s the same opportunity in China, especially when China’s thinking about food security: how do they do a good job with making sure they’re providing for their own population and then how do they make sure they have enough water as well – it’s a big issue in China.

What type of investment coming in from China are you looking for?
Our largest industry is agriculture and our second is manufacturing. So, for example, we met with Jiangsu World Group, who has purchased a lawnmower plant in Beatrice, Nebraska and are expanding their product line there. So other Chinese companies that are looking to come to the market to help expand their presence to the United States, we're a wonderful opportunity for them. We’ve got a great workforce, that’s well educated, great work ethic, loyal and will help a company succeed. And I know from personal experience because I came from the business world and that’s why our family business was so successful because we hired Nebraskans.

What changes are you expecting under the Trump administration?
Certainly I expect the Trump administration to take a different approach to trade because that’s what he said he would do. So I think the negotiations are going to be tougher but I know that what Donald Trump is looking for is just to make sure he’s getting the best deal he can for American companies, which is what every other country in the world does too.

Does that mean more restrictions on trade with China?
I don’t know that it will put any more restrictions on what we’re individually searching for (in China). One of the things that, as a Governor from Nebraska, that I’m going to be working with the Trump Administration on is just how important trade is to Nebraska. Ninety-seven percent of the world’s consumers lie outside our borders. We need to go get them. And that’s one of the ways that, by expanding trade opportunities, we can grow jobs back in Nebraska. So it’s a very important part of our economy and I want to make sure that we’re out there talking about that as we’re structuring new trade deals.

Do you think inbound investment will be more restricted under Trump?
I don’t think that it will be restricted because what we’re looking to do is get that investment. Nebraska for example, our largest foreign direct investor is Japan and the investments they have made really helped us grow jobs in Nebraska. I think there’s the same opportunity for Chinese investors to find that opportunity as well.

Are you limiting yourself to Nebraska-only companies on your trade delegation?
This is just a Nebraska delegation. Not everybody is from Nebraska, some of them are companies that have operations in Nebraska that are being represented here. But it’s really a wide variety of Nebraska companies. Paypal for example is part of this, even though they’re headquarters is outside the state, they have operations in the state of Nebraska so they’re here as part of this trade delegation.

Macau is pushing to diversify its economy. What's your general impression of it?
This is my first visit to Macau and I’m really blown away. I think there’s a lot of energy and vibrancy here and it really is something that people should be very proud of. It’s a great place.

Did you have any contact with the American-based companies in Macau before coming?
Our department of Agriculture has actually arranged a lot of the contacts we have here already with the different companies that are purchasers and that’s why we’re kind of here tonight (at a beef promotion event) to make the impression on and make contact with those companies.

What other big names are with you in the delegation?
We’ve got a variety of farmers and ranchers, we’ve got companies like Paypal, companies like Behlen (farm and ranch equipment), Lindsay (irrigation, transportation, industrial solutions). These are agro-business companies that are creating equipment, or irrigation equipment or that sort of thing. So that’s a lot of the companies that are along on this trip, but we also have people who have other products for the beef industry. It’s a variety of different people.

Logistically, how do you handle the trip throughout China?
The Friendship Association on the Chinese side really does a lot of work for us and helps us out tremendously. So they’ve been fantastic. The consulates also do a lot of work helping us. And then it’s our Department of Economic Development and our Department of Agriculture who really help us develop the relationships to be able to plan our trips.

How frequently do trade missions happen?
I try to do a couple trade missions a year. Last year I went to Japan, China and Europe. This year we’re focusing just on China and Macau and Hong Kong.

So basically you have your own ‘Pivot to Asia’?
Yeah!

Is Hong Kong a large or growing market for you?
Hong Kong is the largest importer of Nebraska beef in Asia. So again we’re here to try and continue to develop those relationships and looking for other ways that we can expand that business opportunity.

Would Hong Kong be a better conduit to gaining more business throughout Greater China than Macau?
Well it remains to be seen but I think they’re different markets. So while Hong Kong doesn’t bring in a lot of raw commodities - beef is a good fit, as it is in Macau. Or in places like Shanghai or Beijing, we’re really talking about more commodities.

You’ve mentioned beef sales would be focusing on the middle-income families. Is there the possibility for expansion to higher markets? Will that be limited by the corruption crack-down?
We’re talking about Nebraska beef: it really is kind of middle income and up. So the upper end of the market is going to want this product as well and again it really gets back to – who is the company that is trying to present the beef? What are they trying to do and how are they trying to brand themselves? But regardless we think we can help create a differentiation for them with Nebraska beef.

Restaurants here recently gained three more Michelin stars– bringing us to 19. Are these restaurants also the targets?
Certainly. If there are restaurants that want to feature Nebraska beef as a differentiator for them, we’d love to talk to them.

How long is the Macau segment of your trip?
One day in Macau and then the next in Hong Kong.

Is trade different when acting as a governor?
Well I think as a governor you’re actually held responsible for doing something, which doesn’t seem to be the trend in Washington DC. So we actually look for opportunities to be able to take care of our people and trade is a big opportunity for many states to expand jobs by finding new markets for their products and services.

Even though the beef ban has been lifted, you're not currently selling beef in China. How long until that happens?
We’re not selling it now. Primarily, they did say they are going to lift it, we’re still working through the details about how that will work to be able to start importing beef, but we’re really looking forward to being able to get that all squared away so we can start bringing U.S. beef into China. It’ll be an exciting opportunity – especially for Nebraska beef.

During Governor Rickett’s visit to the MSAR, he signed letters of intent for purchasing Nebraska beef with the following companies:
- Angliss Macau Food Service Ltd.
- Kateford International
- Saison Food Service Ltd.
- Sutherland Hong Kong
- Wilson International Frozen Foods
- Viva Asia